Are SAP Customers Actually Under Licensed After Indirect Access?

What This Article Covers

  • SAP’s Obsession with and Normalization of the Term Under Licensed
  • Extending The Faux Olive Branch
  • SAP’s New Favorite Word……”Unlicensed” and Its Use with Respect to Indirect Access
  • How About Being Overlicensed?
  • SAP’s Overemphasis on the Term Underlicensed Versus Other Vendors
  • The Likelihood of Being Overlicensed Verus Underlicensed

Introduction

SAP has written a great deal about customers that are “under licensed” with respect to indirect access. In this article, we will describe how SAP uses the term under licensed.

This is a quotation from their announcement at SAPPHIRE on indirect access.

If you’re fully licensed, there’s no action for you.

That would logically follow.

Still, it is curious how SAP can make the fact that a company is in license compliance with SAP sound like SAP is doing their customers a favor by telling them there is no action to be taken.

But while the statement from SAP sounds innocuous, it should be noted that is no way of knowing if you are “fully licensed.” This is because, under SAP’s definition of indirect access, which we call Type 2, all customers that use non-SAP products are potentially not fully licensed. This is the problem with clarity that SAP has very deliberately put out into the market.

Here SAP is proposing that something is “knowable” when in fact it is entirely at the discretion of SAP. This would be like me saying “guess how many coins are in my pocket. If you guess correctly you will win a new set of steak knives. However, how will you ever know how many coins are in my pocket for sure if I am the one who reveals to you how many coins I, in fact, have in my pocket? 

This is the problem with the opacity that SAP has very deliberately put out into the market with respect to indirect access.

From this deliberately created insecurity, SAP then proposes that customers reach out to them to find out if they are unlicensed.

However, if you’re questioning whether you are under-licensed, let’s talk about it. We want customers to proactively engage us on this topic.

Under SAP’s definition of Type 2 indirect access, 100% of customers would need to reach out to SAP to find out for sure.

Naturally, this is less work for SAP.

But SAP demands do not stop there. SAP also wants the following:

  • SAP wants customers to accept their interpretation of indirect access and normalize Type 2 indirect access.
  • SAP also prefers that no meddlesome outsiders be used to negotiation with SAP. It is SAP’s preference that work with them one on one.
  • All customers need is to talk to your SAP account executive.

SAP has a lot of requests on indirect access, and customers that accept them uncritically set themselves for quite a few liabilities.

In order to get customers to do what they want, SAP offers the following carrot.

SAP assures customers who proactively engage with SAP to resolve such under-licensing of SAP software that we will not collect back maintenance payments for such under-licensing.

SAP could teach a master class on deceptive writing. Look at the previous paragraph and what does it appear to say?

  • At first glance, it may appear to say that SAP will not collect back payments for under-licensing. However, SAP will only waive back maintenance payments.
  • So in return for a reduction in 22%+ in support payments, SAP will get a sizable number of companies to report to SAP.

Seems like a pretty good deal for SAP.

Yet, SAP wrote the paragraph as if they were offering a gift to their customers.

Strange gift. Is this a concession to customers, or simply a way to get customers to come forward to do what SAP wants?

This is how SAP wants its customers to think of their relationship so that they will lower their guard. 

But savvy customers should think. Is this really a good description of how SAP tends to behave in negotiations? 

Extending The Faux Olive Branch

Now the faux olive branch is further extended.

We will look at your specific circumstances when resetting your licensing agreement, including providing you the opportunity to receive credit for certain products you may have already licensed so you can update to the new metrics.

That should normally be the case, so this is no concession.

Translation, you as a customer owe SAP money. They owe it because of the all-encompassing definition of Type 2 indirect access places all SAP customers into the bucket of being potentially under license. This gives SAP maximum latitude in when to indirect access charges against a customer.

But if you report to SAP, they will go easy on you…at least that is the pitch.

Like a kid who just got a new paint set, SAP is slathering the term “under licensed” everywhere it can. In doing so, it seeks to adjust the conversation with customers to how much a problem SAP under licensing is.

SAP’s Overemphasis on the Term Underlicensed Versus Other Vendors

Without the faux concept of Type 2 indirect access, SAP and Oracle are vendors with the lowest degree of under licensing in enterprise software.

Vendors like Teradata or SAS not use this terminology. In fact, I was not able to find a single result for the terms “Teradata + under licensed” or “SAS + under licensed” in Google.

SAP defenders will often defend dodgy practices by saying that “everyone is doing it.” However, both observations, our network, as well as Google seem to be saying that not all vendors behave this way.

SAP’s New Favorite Word……”Unlicensed” and Its Use with Respect to Indirect Access

SAP loves to pitch the narrative of being under licensed. A full analysis of this announcement can be found at the article An Analysis of SAP’s Faux Policy Change on Indirect Access.

How About Being Overlicenced?

SAP will never speak about customers that are over-licensed. However, being over licensed is quite common. There are several reasons for this. Users are created, but then sometimes abandoned.

  • People leave the company but their users are still in the system
  • Consultants come and go
  • Customer over purchase SAP licenses and never optimize their licenses.

In speaking with multiple SAM or software asset management vendors on this topic, in most instances, over licensing is more common than under licensing. SAP will not give back money to a company, so being over licensed means having a “bank” of unused licenses that can be used in the future. During the yearly soft audit run by

In fact, SAP has very little interest in even discussing the topic of overlicensing, even though it is far more common than underlicensing.

  • Yearly Soft Audit: During the yearly soft audit run by SAP the customer only hears back if they are “under licensed.”
  • The One Time Overlicensing is Brought up by SAP: If you are over licensed, SAP will have nothing to say on the matter. Over-licensing may be used by the account executive to get the customer to purchase a product the account executive wants them to purchase. Finally, at this point, the discussion of trading in unused licenses will be brought to make the sale for the new product.

Conclusion

  • Companies should never accept SAP’s presentation of their licensing state. The licensing status presented by SAP is a mechanism to get the most license revenue out of the customer.
  • Companies should not simply accept the assumption regarding Type 2 indirect access.
  • Brightwork’s extensive research into the topic has illustrated that neither SAP nor any of SAP’s surrogates (ASUG, Deloitte, Gartner, etc..) have provided accurate information on indirect access. In fact, much of it is deliberately misleading.

References

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